If you look for corrections they show up when portfolios rebalance.
In California the correction is the downward price that requires pension funds to shift gains from previous years. They have to help cover the standard discount rate.
Pension funds don't have the liquidity, they shift in larger chunks than the debt pits were prepared for, the debt market requants We will get California economic turbulence as all the debt markets shift in response.
So what? That was the idea of the Jerry Brown's rainy day fund, to grease the wheels and make smaller shifts more often, keep bit error low. Pits out of balance is a recession.
No comments:
Post a Comment